Jackson(JXN)2025-02-26 21:16Sales and Market Performance - Total retail annuity sales for the years ended December 31, 2024 and 2023 were 12.8 billion, respectively, representing a year-over-year increase of 39.1%[21] - Institutional product sales for the year ended December 31, 2024, were 8.4 billion as of the same date[36] - Jackson National Life accounted for 12.3% of all sales in the U.S. variable annuity market for the nine months ended September 30, 2024, ranking 2 in variable annuity sales[42] - The RILA market has grown at a compound annual growth rate of 30% from 2020 through 2024, indicating significant growth potential in this product category[33] Asset Management and Financial Strength - As of December 31, 2024, Jackson National Asset Management LLC managed 20.6 billion, reflecting the company's commitment to managing its in-force business efficiently[38] - As of December 31, 2024, the company's total adjusted capital and RBC minimum required levels substantially exceeded state standards[78] Risk Management and Compliance - The company maintains a financial recovery plan and conducts regular stress and scenario testing to assess its risk profile[57][58] - The risk management framework is reviewed annually by the Board of Directors to ensure compliance with regulatory requirements[50] - The company utilizes third-party reinsurance to mitigate risks related to longevity and mortality in its in-force annuity and life insurance products[63] - The company is subject to regulation under various insurance holding company laws, requiring registration and reporting on capital structure and financial condition[102] Regulatory Environment - The Financial Stability Oversight Council (FSOC) adopted a new analytic framework for financial stability risks in November 2023, which may increase the likelihood of the company facing additional regulatory measures[84] - The Department of Labor's 2024 Fiduciary Advice Rule redefines fiduciary "investment advice" to ERISA plans and IRAs, extending fiduciary status to one-time rollover recommendations[89] - The NYSDFS Cybersecurity Regulation was amended on November 1, 2023, to include new requirements for risk assessments and cybersecurity policies, with phased implementation starting December 2023[96] - The SEC adopted amendments on July 26, 2023, to enhance and standardize disclosures related to cybersecurity, significantly expanding annual disclosure requirements for public companies[99] Operational and Strategic Initiatives - The company focuses on growing sales through Independent Registered Investment Advisors (RIAs), who managed approximately $8.48 trillion in investor assets at the end of 2023, indicating a strategic growth opportunity[42] - The company has committed to sustainability initiatives, including a solar farm that reduces reliance on external power generation[115] - The company promotes community engagement through charitable donations and volunteer programs, aligning its philanthropic strategy with its business purpose[116] - The company has implemented a hedging program aimed at protecting statutory capital and stabilizing distributable earnings throughout market cycles[62] Workforce and Internal Development - As of December 31, 2024, the company had approximately 3,970 associates, including 3,060 full-time and 910 part-time associates[119] - The senior management team has an average tenure of over 20 years, indicating strong internal talent development[120] - The mentoring program, which began in 2021, has seen participation from approximately 80 mentors and over 230 mentees, with a satisfaction rating of 4.8 out of 5[122] - The Employee Assistance Program provides confidential support for emotional stress and well-being, contributing to associates' financial wellness[126] Financial Risks and Challenges - The company faces liquidity risks associated with sourcing a large concentration of funding from the Federal Home Loan Bank of Indianapolis[156] - Economic downturns could adversely affect policyholder behavior, impacting sales and profitability[136] - Interest rate movements could lead to financial losses, particularly in prolonged low or high rate environments[140] - The company holds illiquid investments, including privately placed fixed maturity securities and mortgage loans, which could adversely affect cash flows if liquidated under market volatility[157] Cybersecurity and Technology Risks - Increased cybersecurity threats could lead to financial losses, regulatory fines, and damage to the company's reputation due to potential data breaches[196] - The company relies on third-party vendors for information technology security, exposing it to risks of data breaches and operational disruptions[197] - The use of artificial intelligence may result in errors in analysis and decision-making, potentially leading to regulatory fines and reputational damage[200] Legal and Regulatory Risks - The company faces significant risks from litigation and regulatory investigations, which could adversely affect its financial performance and reputation[192] - Regulatory compliance failures could result in fines and restrictions on product sales, adversely impacting business operations[179] - A decline in the risk-based capital (RBC) ratio could lead to increased scrutiny from regulators and potential corrective actions, adversely affecting financial condition[180][181]